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Plan Well, Retire Well

Saving and investing your money

Two Reasons to Think about Xmas in July

Do you know what happens in less than 22 weeks? It's Xmas! That means we have less than 154 shopping days left. You're probably wondering why I would bring this up in July. Well, for two reasons:

When we plan ahead for occasions that require extra money, we can save for expenses rather than using credit, which can be costly. Now is a great time to plan for holiday expenses, no matter which holiday you're celebrating.

Do you know how much you spend during the holiday season? Now might be a good time to estimate costs. Don't forget that the holidays involve more costs than just gifts. Sometimes holidays can mean more money spent on food, travel, and other related costs.

For a handy guide to estimating costs, you can download for free "Control Your Holiday Credit Card Debt."

Let's say that you estimate your holiday costs are $500. Is that a reasonable amount to save? It's easier to decide if you know how much you need to save each week. We have 22 weeks 'til Xmas, therefore, you'd need to save $23 a week. Does that sound reasonable or do you need to adjust your plans?

With time on your side, you can adjust your costs, if needed. Here are some ideas:

  • Watch for sales and spend less;
  • Make gifts;
  • Give the gift of time or services;
  • Talk to extended family members about changing gift giving patterns. Perhaps names can be drawn so that fewer gifts are given by each person.

What if want to start saving now for a summer vacation next July? The same technique can help. You have 12 months to save. Let's say you want $1200 for your vacation – that would be $100 a month or approximately $25 a week.

You may want to have a special savings account to deposit money for long-term goals. This will allow you to check your progress. For example, by the end of January you would need $600 saved for your vacation goal. You can check on your progress during the year and know if you need to adjust your goal or spending habits as you go.

Planning ahead gives you flexibility to adjust plans, save up for expenses, and avoid using credit. This is a good reason to think about Xmas in July! What is my other reason for talking about it now? Perhaps by visualizing snowy weather and festivities, it will help us all manage with the summer heat. Stay cool!

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